Correlation Between New Wave and Celtic Plc
Can any of the company-specific risk be diversified away by investing in both New Wave and Celtic Plc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining New Wave and Celtic Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Wave Holdings and Celtic plc, you can compare the effects of market volatilities on New Wave and Celtic Plc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in New Wave with a short position of Celtic Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Wave and Celtic Plc.
Diversification Opportunities for New Wave and Celtic Plc
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between New and Celtic is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding New Wave Holdings and Celtic plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celtic plc and New Wave is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on New Wave Holdings are associated (or correlated) with Celtic Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celtic plc has no effect on the direction of New Wave i.e., New Wave and Celtic Plc go up and down completely randomly.
Pair Corralation between New Wave and Celtic Plc
Assuming the 90 days horizon New Wave Holdings is expected to generate 5.31 times more return on investment than Celtic Plc. However, New Wave is 5.31 times more volatile than Celtic plc. It trades about 0.08 of its potential returns per unit of risk. Celtic plc is currently generating about 0.04 per unit of risk. If you would invest 1.21 in New Wave Holdings on December 1, 2024 and sell it today you would earn a total of 0.19 from holding New Wave Holdings or generate 15.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 93.75% |
Values | Daily Returns |
New Wave Holdings vs. Celtic plc
Performance |
Timeline |
New Wave Holdings |
Celtic plc |
New Wave and Celtic Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Wave and Celtic Plc
The main advantage of trading using opposite New Wave and Celtic Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Wave position performs unexpectedly, Celtic Plc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Celtic Plc will offset losses from the drop in Celtic Plc's long position.New Wave vs. OverActive Media Corp | New Wave vs. Network Media Group | New Wave vs. Celtic plc | New Wave vs. Guild Esports Plc |
Celtic Plc vs. Guild Esports Plc | Celtic Plc vs. Network Media Group | Celtic Plc vs. OverActive Media Corp | Celtic Plc vs. New Wave Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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